Climate Change in Latin America and the Caribbean: Policy Options and Research Priorities

63 Pages Posted: 30 May 2015

See all articles by Brian Feld

Brian Feld

Universidad EAFIT - School of Economics and Finance

Sebastian Galiani

University of Maryland - Department of Economics

Date Written: May 29, 2015

Abstract

Although climate change is filled with uncertainties, a broad set of policies proposed to address this issue can be grouped in two categories: mitigation and adaptation. Developed countries that are better prepared to cope with climate change have stressed the importance of mitigation, which ideally requires a global agreement that is still lacking. This paper uses a theoretical framework to argue that in the absence of a binding international agreement on mitigation, Latin America should focus mainly on adaptation to cope with the consequences of climate change. This is not a recommendation that such economies indulge in free-riding. Instead, it is based on cost-benefit considerations, all else being equal. Only in the presence of a global binding agreement can the region hope to exploit its comparative advantage in the conservation and management of forests, which are a large carbon sink. The decision of which policies to implement should depend on the results of thorough cost-benefit analysis of competing projects, yet very little is known or has been carried out in this area to date. Research should be directed toward cost-benefit analysis of alternative climate change policies. Policymakers should compare other investments that are also pressing in the region, such as interventions to reduce water and air pollution, and determine which will render the greatest benefits.

Keywords: climate change, adaptation, cost-benefit analysis.

JEL Classification: Q52, Q54.

Suggested Citation

Feld, Brian and Galiani, Sebastian, Climate Change in Latin America and the Caribbean: Policy Options and Research Priorities (May 29, 2015). Available at SSRN: https://ssrn.com/abstract=2611954 or http://dx.doi.org/10.2139/ssrn.2611954

Brian Feld

Universidad EAFIT - School of Economics and Finance ( email )

Carrera 49 N° 7 sur – 50
Medellín, Antioquia 50021
Colombia

HOME PAGE: http://www.brianfeld.com

Sebastian Galiani (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

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